Q&A: Hunter Lovins

For our 30th anniversary issue, I interviewed three pioneers in the green building movement: Bill McDonough, USGBC President and CEO Rick Fedrizzi, and Hunter Lovins. It turns out all three of them share a common approach to environmentalism. They engage with business, rather than confront it. I’d call it second (or maybe third) wave activism. And no one has been at it longer than Lovins, who in 1982 co-founded (with Amory Lovins, her ex-husband) the Rocky Mountain Institute. Today Lovins serves as executive director of Natural Capitalist Solutions, a non-profit dedicated to helping businesses, governments and civic organizations embrace sustainability. She is co-author (with Boyd Cohen) of a new book, Climate Capitalism: Capitalism in the Age of Climate Change. The following is an edited transcript from her insightful conversation.

Martin C. Pedersen: You say the “three-Ls” used by the environmental movement—legislation, litigation, and lobbying—aren’t working. What does work, you argue, is engaging with business. But we’re nowhere near a tipping point for industry and climate change action. In fact the U.S. Chamber of Commerce is dead set against any kind of carbon legislation—

Hunter Lovins: The U.S. Chamber of Commerce is not the voice of industry. It is a self-appointed, right-wing organization that is trying to force policy that is manifestly uneconomic and will tip the country back into financial collapse. We now have pretty good evidence that the financial collapse was driven in large part by the way we’ve been doing business. Prior to 2008, we were borrowing $2-billion a day, largely from the Chinese and the sovereign wealth funds of the Middle East, to buy imported oil from the sovereign oil funds of the Middle East, in competition with the Chinese. Oil hit record heights, a hundred-fifty a barrel, a few months before the economy went into collapse. If we fail to deal with this fundamental un-sustainability, we will lurch from collapse to collapse to collapse. The most interesting of the Wiki Leaks revelations were that the Saudis had been cooking their books on oil.

MCP: And they have more or less oil than they’re reporting?

HL: Considerably less! Now this should not come as a surprise. I suppose it does, because we’d like to believe that oil is infinite. And indeed the U.S. Chamber of Commerce and folks at the International Energy Agency have been saying this for years. But of late the IEA has stopped saying it. You may have noticed—maybe not, I don’t think it was reported in this country, I read it in the Financial Times—that a couple of IEA employees whistle-blew, accusing the organization of cooking its books. There is actually a lot less oil than anybody thought. The British government said: “We base our national projections on IEA numbers, where did those numbers come from?” The IEA’s chief economist replied, “Well, they’re assumptions.” So the British government commissioned an industry task force, chaired by the managing director of Royal Dutch Shell, which called for an immediate transition to green transport. Another report came out last year saying that within three to four years we can expect real constraints on the supply of conventional oil, i.e. Peak Oil. So, again, I submit that what the Chamber of Commerce is saying is precisely the opposite of what is in businesses interest.

MCP: It’s clear there are now a number of enlightened corporate players, but not nearly enough, given the time constraints.

HL: It’s no doubt a horse race between enlightenment and catastrophe. But if you had told me five years ago that WalMart would be the entity on the planet doing the most to drive sustainability, I’d have offered to bet eating my hat.

MCP: Do you remember when that started to change?

HL: In 1999 a group of us wrote a book called Natural Capitalism. A year later I was with Ray Anderson, who was one of the early CEOs to really get this. He was the first one who put me onto the notion that a deep commitment to sustainability enhances every aspect of shareholder value. That driving sustainability deeply into every aspect of your company cuts costs, drives innovation, enhances profitability, and enables you to attract and retain the best talent. Once you have that talent, it enhances labor productivity by six to sixteen percent. It reduces risk of lawsuit, of being out of compliance. It reduces the cost of distrust.

MCP: You believe that, I believe that, why doesn’t business at large believe it?

HL: Right now nothing about sustainability is on anybody’s balance sheet. It only shows up as a cost. Somewhere the accounting is wrong. Oystein Dahle, a retired vice president of Esso for Norway, once said, “Communism failed because it wouldn’t allow the markets to tell the economic truth. Capitalism may fail because it doesn’t allow the market to tell the ecological truth.” We’re not counting the real costs and benefits. So what we’re trying to do is make the business case for sustainability. Sure, it’s the right thing to do. And in the end, as Ray pointed out, “What’s the business case for ending life on earth?” But in the short run, investors want to know that if you’re spending corporate dollars for a sound reason. We’re working hard with companies to enable them to demonstrate that to even the beadiest-eyed Wall Street analyst.

MCP: Do you think we’re going to win this horse race?

HL: Depends on which day you ask. Last fall word came that the Chicago Climate Exchange had closed. And it really hit me hard. I thought: if Richard [Sandor] can’t pull it off, then what the hell hope do I have? It put me into a pretty fair depression. My staff was actually worried. I was thinking: why am I riding airplanes? Why don’t I stay home and ride my horse? I live on a beautiful ranch in Colorado. And if all we’re doing is just banging our heads against the wall, then we’re losing. And we are losing. There is no doubt about that. Why the hell am I doing it? I was talking with Eric Berlow, with whom I’m building a new organization called Madrone project, which uses digital platforms to take education issues around sustainability global. He said, “It’s like skiing in the trees. Don’t look at the trees, or you’ll hit one.” I laughed. Then I thought: Ah, hell, I can’t quit. So if you asked me today, I’d answer, “Yes, we’re going to make it!” You asked me earlier when was the moment this started to tip. It was that conversation with Ray. I said to him, “If all this stuff is true, why isn’t it breaking out everywhere?” And he said, “It is! Every corporate leader I meet is starting to talk about this. Change is slow.” Margaret Mead said, “The only person who likes change is a wet baby.” And I’d argue that the baby squalls throughout the whole process.